Prime Minister George Papandreou said Friday that Europe must act swiftly to address the continent’s widening debt crisis, saying that the rout in global financial markets showed a deepening skepticism over Europe’s ability to contain the crisis.
In a letter to European Commission President Jose Manuel Barroso, Papandreou called on fellow European Union member-states–and in particular, national lawmakers–to quickly implement policies agreed at a July 21 European summit aimed at stemming the contagion. “Recent developments mainly reflect an increasing skepticism about the systemic capacity of the euro area to respond to the ongoing crisis,” Papandreou said. “Provided these decisions are implemented in a timely and effective way, they will equip us with all those institutional and financial tools necessary for tackling swiftly the euro-zone public debt crisis.”
Last month, European leaders agreed on a fresh EUR109 billion assistance package for Greece, as well as a series of other measures aimed at stopping the Greek debt crisis from spreading to other euro-zone countries. Among the measures approved, were new powers for Europe’s temporary bailout fund to intervene in markets and make fresh loans to countries in need of financial assistance. However, those new powers have yet to be approved by national legislatures–a process that could take months and which has stoked doubts in financial markets over Europe’s ability to respond quickly.
“The decisions having been taken by the leaders, the appropriate European institutions as well as member-states should proceed now to action and, in particular, the national parliaments, where that is necessary,” Papandreou said. On Thursday, Greece’s parliament passed an omnibus reform bill that aims to overhaul everything from online gambling to tourism developments, while also cutting civil service bonuses and pensions, among other things.
The bill is part of a series of reforms that Greece has promised its international creditors–the EU and the International Monetary Fund–in exchange for fresh aid.
(source: Dow Jones)
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